The Homosexuals, "3am (Pink Pony)"

How can you not love a band named the Homosexuals? You know the drill, I post bad or "gay" music when I lose money... I'll let you decide which this is.

The RO Report, "Dead And Deader" Edition

It's hard to explain how completely mindfucked I've become in just a few short days.

The destruction continues.

The best way for me to look at all of this is to say, "Well, I've been at this for 10 years, and most likely will be at it for another 10." Hopefully, in February of 2019, this past two weeks will be a blip.

Anyway, it's not like the RO had it easy either. It's just not an easy environment. There's a lot of news driving trade... we have employment data out tomorrow... and now it looks like Geithner will be dropping the details of the "comprehensive financial framework plan" on Monday.

Just lots of static.

Out of 28 traders today, 15 were gross positive, or 54%. 5 traders made over $1,000 gross and 7 traders lost over $1,000 gross. I was #25 or 28. Charred.

Blog note: Please Digg this post if you haven't already.

"Chambermaid" - Trader A, -$10,966 on 203k shares traded.

2. Trader C, -$9,472 on 177k shares traded.
3. Trader N, -$4,963 on 59,600 shares traded.
4. Trader S, -$4,011 on 146k shares traded.
5. Trader F, -$3,520 on 28,800 shares traded.

"Lucky Pierre" - Trader D, $4,431 on 364k shares traded.

2. Trader H*, $3,435 on 5,700 shares traded.
3. Trader 6*, $1,241 on 900 shares traded.
4. Trader J, $1,223 on 24,800 shares traded.
5. Trader T, $1,029 on 6,355 shares traded.

Open Letter To A Digg Poweruser: or, WTF? My One-Legged Girlfriend Has a Nasty Unibrow! LOL!!!

Dear Sir, Madam or Robot,

Hello, I am a third-tier blogger. I've been trying hard to grow my readership and I hoped "the digg" could help.

However, every time I write a humorous, or (gasp!) thoughtful piece and try to have it dugg, I invariably end up with only a handful of diggs. Then some dude will comment, "Great piece... too bad it will never see the light of the homepage because of all the Powerusers. Har! Har! Har!"

So I ask you, Poweruser... Who are you? What do you want? And what kind of sick world do you come from?

You see, I'm not angry at you for being so powerful. I'm just trying to understand you... Every land has its kings; I get it. Do you get anywhere by fighting the king? Not with 24 "mutual friends" you don't!

So, lets just take my recent piece as an example.

I watched in dismay as my little "skit" languished under a picture of a man's unibrow and 40 submissions from Cracked.com. Apparently, Powerusers love unibrows and "cracked" has many interns with digg accounts. Lesson learned.

I then watched as a picture of a girl with one leg gained over 6000 Diggs!

I didn't understand what was going on, until I saw a horse's head sticking out from a well behind the girl. The head was circled in red with the letters WTF? scrawled over it.

No doubt, this made me chuckle. And indeed, it's quite possible that while looking at my screen I shook my head in dismay and reflexively mouthed the words, "What The Fuck?" I mean, truly, "what the fuck" is that horse doing there? And what happened to the girls leg? So many questions!

Perhaps it's the mystery of the photo that led to the amazing amount of diggs? From this can we infer that Powerusers are intrigued by all of life's mysteries?

Or is it as simple as people wanting to take a quick look at a picture of a sunken horse/one-legged girl say, "I Digg that" and move on? Could it be there is no Poweruser conspiracy?

If so, does this in some way prove what my father-in-law is always telling me about popular "culture?" That "American Idol" and celebrity worship exist because "that's what people want" and not because there's some grand conspiracy to dumb Americans down and shift their attention from what's really important?

I hope not... because it's much easier for me to want to blame a small group of powerful people than for me to blame humanity in general.

Your humble third-tier blogger,

Dinosaur Trader

Feral Children, "Spy/Glass House"

Needed something visceral tonight.

The RO Report, "Decoupling" Edition

I've been to hell and back today, so excuse that smokey smell on the blog. I think I need to change the color from the ash gray...

A couple of smart traders pointed out the same thing to me today; perhaps the market is finally making a differentiation between the good and the bad banks. All morning long, I smoked myself by shorting the "good" bank, GS, thinking that the "bad" bank, BAC, had to drag it lower. Perhaps a few weeks this trade could have worked, but not today.

However, it would be great if the market started to differentiate, at least if you're a bull.

All that said, we had a full reversal.

Anyway, it was more tough sledding for the RO but overall, we finished slightly green. Unfortunately, we need a couple of outperforming swing accounts to get us there. Out of 29 traders today, 13 were gross positive, or 45%. Shitty! 5 traders made over $1,000 gross and 4 traders lost over $1,000 gross. I was #27 of 29. Out of order.

"Lucky Pierre" - Trader H*, $4,583 on 23,600 shares traded.

2. Trader B, $4,474 on 178k shares traded.
3. Trader A, $2,531 on 124k shares traded.
4. Trader 10*, $2,317 on 1,000 shares traded.
5. Trader D, $2,158 on 170k shares traded.

"Chambermaid" - Trader K, -$6,295 on 111k shares traded.

2. Trader N, -$3,073 on 101k shares traded.
3. Trader S, -$2,142 on 58,200 shares traded.
4. Trader J, -$1,033 on 28,400 shares traded.
5. Trader V, -$972 on 49,200 shares traded.

The Balcony

The dude who was mumbling gypsy curses at his monitors seemed normal when I introduced myself. He stood up and gave me a wide grin, but quickly sat back down to continue cursing his screens. I thought this odd, but I would soon identify it as his signature move.

As he weaved his tapestry of curses he would hold the back of his right hand up in front of the monitor in a menacing way. I imagined he was saying something to the effect of, "You misbehaving pile of silicon, you want me to slap you? Eh? Is that what you want?" He'd hold the hand there for a couple of seconds, slowly shaking it. Then, when his stream of curses reached their crescendo, he'd quickly bitchslap the monitor with the back of his fingers.

The seat on the other side of me was empty, but the monitor situation was telling.

Used tissues were stashed into the millimeter of space between the screens, and the sticky keyboard looked like the inside of a chimney; thick, black, and sooty. Fruit flies were quietly circling the open mouth of a Snapple Iced-Tea bottle. It was filled with a clouded brown fluid from which a solid piece of fungus was emerging. It seemed that this fungus was attempting to make an evolutionary leap, and that if it succeeded in escaping the confines of the bottle, it might walk off the desk.

Most telling was a sticker that had been plastered to the middle monitor; it read, "My other butt is my ass."

When my neighbor did return to his desk, moments after I first sat down, his odor preceded him; eau de smoked cigarettes. Surely this man, if tested by the FDA, would qualify as a carcinogen. Indeed, his nickname was "Char" which was short for Charlie but given what his lungs must look like, had a sad double meaning. His face was tomato-red and shiny, as if his skin was stretched too tight. He was slightly overweight and his clothes were always disheveled.

Amazingly, he'd always complain about his inability to attract females.

I'm not sure how Char ever became a successful trader, because every 10-15 minutes, he'd walk out to the "balcony," which was a small ledge overlooking a ventilation shaft, and smoke a cigarette. I don't smoke, but as I got to know him better, sometimes I would accompany him out to the "balcony" so we could talk about trading.

We were on the 7th floor, and looking straight down from the balcony, you could see the floor of the shaft, littered with cigarette butts. In the middle of the floor, was a large circular container. It was impossible to tell what it was from seven stories up, but that didn't stop the smokers from aiming their thrown butts for it, to "make a basket."

The balcony was an interesting place to hang out, because every smoker who was on the 7th floor congregated here, even the men in uniform from the well-heeled brokerage house next door. They'd gather and talk about what you'd expect...golf, football, or how they had successfully duped an unsuspecting customer.  Another person who hung out here was one of the better traders from the company, Bobby Trimbo.

Now, I'm an honest person, and perhaps even a little naive. I understand there is evil in the world, but I always think of the evil as being "out there" and not right up in my face. People who commit mass murder are evil... child abusers and pedophiles are evil... Dick Cheney is evil... but this Bobby Trimbo character was pure evil and sharing a ledge that hung over a 70 foot drop with me. It was always unsettling when he was there.

He'd come out onto the balcony with his little "yes man" and talk up a storm. The balcony was small and could only fit about 5 people, but despite the close quarters he never really paid anyone else any heed. He'd be talking to his "yes man" while waving his hands in little circles up out in front of his face, near his shoulders, about some of the trades he was making. I didn't understand what he was doing, but he was always talking about "distributing" shares and "finding buyers" for massive quantities of stock. Oh, and fucking people. He was always "fucking somebody up" and very proud of it.

My cancer-riddled neighbor would grow silent when Trimbo was out on the balcony, and this was something, because most of the time he wouldn't shut up.

One day we got to the balcony just as Trimbo was about to leave. Trimbo turned to open the door as he took a final drag from his cigarette and then threw it over his shoulder towards the shaft. Char was trying to light his "smoke" when Trimbo's used Marlboro Red bounced off his eyebrow and hurtled down the 7 stories. 

Char wore the little brown burn mark near his eyebrow like a badge of honor; it nearly improved his appearance. But the cigarette drifted down and landed perfectly in the middle of the container, where it started a small fire. 

The balcony smelled of the smoke it caused for days.

A couple of years later, Trimbo would start larger fires...

Cher, "If I Could Turn Back Time"

I can't take this music much longer... tomorrow I must make money.

The RO Report, "Kill Me Now" Edition

It's amazing how fast this job changes. Two weeks ago, I was on top of the world. Since then, I've had two big down days and now I'm just bleeding money. I'm barely up on the year and scared that I'm gonna have to sell my house and move to some Red state.

The RO did okay though. A decent bounce back from yesterday's slaughter.

Fuck those guys.

Let's talk about me again...

Is this market going to save my ass again? Can we get some action? I'm coming up on my 10 year anniversary as a full time trader in March. I want it to be a good one.

The problem is that I'm still bearish. I don't believe in breakouts anymore, just breakdowns, and this little bounce is causing me fits.

The RO had more perspective though, and caught the long. Out of 29 traders today, 20 were gross positive, or 69%. 6 traders made over $1,000 gross and 3 lost over $1,000. I was #23 of 29. Moosecock.

I'll have a history post up tomorrow. Enjoy your night.

"Lucky Pierre" - Trader D, $4,174 on 222k shares traded.

2. Trader A, $4,168 on 137k shares traded.
3. Trader H*, $3,568 on 12,600 shares traded.
4. Trader B, $3,105 on 139k shares traded.
5. Trader 10*, $2,389 on 200 shares traded.

"Chambermaid" - Trader 8, -$1,856 on 44,800 shares traded.

2. Trader C, -$1,700 on 85,900 shares traded.
3. Trader F, -$1,040 on 18,000 shares traded.
4. Trader 9*, -$614 on 0 shares traded.
5. Trader &, -$549 on 9,600 shares traded.

Blogroll Amnesty Day

Today is "blogroll amnesty day" which you can read about in depth over at Jon Swift's blog.

It's the only holiday celebrated by the blogosphere and a great idea. I keep my blogroll tight because I like to visit the blogs on it at least a few times a week, but there are many more I would add if I had loads of time/space. Please take a moment to visit these great trading blogs.

(Except Richie's... I'm just throwing that up there because it was hijacked and I think it's hilarious.)

UPDATE: Unfortunately, someone got their blog back. Link removed.

TraderAM

Stock Rookie Goes Pro

Am I Bald?

Todd's Trade

Jules In Jumbles

Sage

Stock Hunter

Stock Picks

Market Monk

Bruce Kovner: Market Wizard

In the second chapter of Market Wizards, Schwager interviews Bruce Kovner, protege of Michael Marcus.

I liked this interview a lot, mostly because it really seemed that Kovner thought trading was a big game. As he explained:

The pleasure [of trading] is purely intellectual. For example, it is trying to figure out the problems the finance minister of New Zealand faces and how he may try to solve them... Here is a guy running this tiny country and he has a real set of problems. He has to figure how to cope with Australia, the U.S., and the labor unions that are driving him crazy. My job is to do the puzzle with him and figure out what he is going to decide, and what the consequences of his action will be that he or the market doesn't anticipate. That to me, in itself, is tremendous fun.

I can appreciate that. It's not that I wake up each morning thinking in these terms; obviously, Kovner is playing a different game. But what I found appealing was the idea that the markets can be figured out and that there is a human element behind them. When you stare at screens full of numbers all day, that's easily forgotten.

Actually trying to "figure out" the market as opposed to simply reacting to it, is relatively new to me. For much of my career I've been an intuitive trader; a sort of "drunken master," if you will. Developing a daily strategy has given me a new appreciation for trading. It has made it fun again. In this manner, I can relate to Kovner's feelings about it being a game.

Like Marcus, Kovner had an early taste of trading loss. However there was one big difference. Kovner didn't come in and lose a bunch of money like Marcus. Instead, he made a good amount, and gave back half. In the RO, a question that often comes up is, "Is it better to make money and lose it, or to never had made it at all?" Kovner's big giveback taught him the rather unpleasant lesson that he didn't understand the risk involved his trade. The realization that you can lose money in the market as easily as you can make it, was jarring for Kovner.

In discussing the influence that Marcus had on his trading, Kovner didn't talk about the technical aspects he had learned from Marcus, or even what markets they traded. Instead, he simply states that Marcus taught him that he "could make a million dollars." That kind of money was a reality for a good trader. This gave Kovner confidence. Working with the talented members in the RO, I learn this lesson almost every day. There is always someone out there killing it. Why can't it be you?

But, in one of my favorite ironies of trading, the sky is the limit, but only if you're humble and allow yourself to make mistakes. In Kovner's words... "You have to be willing to make mistakes regularly; there is nothing wrong with it. He [Marcus] taught me about making your best judgement, being wrong, making your next best judgement, being wrong, making your third best judgement, and then doubling your money." However, through the losses and the gains, it's important not to personalize your P&L. If you do, it will cripple your ability to trade.

Kovner says the best traders are "strong, independent and contrary to the extreme." He forgot one other thing... many of them like men... at least that's true of some of the best traders in the RO.

Kovner decides to "nerd up" the discussion on breakouts by throwing out the "Heisenberg Principle." It's cool, I already googled it. It states that if something is closely watched, it's going to be altered in the process. So, as it relates to breakouts, Kovner likes to see a stock break out for no apparent reason rather than break out because of a positive news article. This has been my experience as well... the best trades often have the fewest eyeballs watching them.

It's hard to find exact rules in the Market Wizards book. It's more a book of inspiration, a book that lets you know you "could make a million dollars." However, Kovner is very specific about his stop placement rules.

Given today's volatile markets, I found the following very pertinent:

It is better to allocate the predetermined maximum dollar risk in a trade to a smaller number of contracts, while using a wider stop. The is the exact reverse of the typical trader, who will try to limit the loss per contract, but trade as many contracts as possible-an approach which usually results in many good trades being stopped out before ht market moves in the anticipated direction. The moral is: Place your stops at a point that, if reached, will reasonable indicate that the trade is wrong,not at a point determined primarily by the maximum dollar amount you are willing to loser per contract. If the meaningful stop point implies an uncomfortably large loss per contract, trade a smaller number of contracts.

Good trading. Next Tuesday I'll discuss the trader Richard Dennis. Tomorrow, a history post.

ABBA, "Dancing Queen"

The RO Report, "RIP RO" Edition

I'm going surfing. Everyone is dead.

UPDATE: I honestly can't recall the last time I saw such a bloodbath. Now, we didn't have any one trader losing enormous size today... instead, it was like, decent losses across the board.

Widespread death. An epidemic of idiocy. The Great Depression has found its way to the RO.

It's late and I need to go eat dinner. I can't even offer much color other than the red. In fact, to mark this occasion... I'm changing the colors of this blog until the RO is no longer gay... and the song this evening will be purely horrid.

Out of 29 traders today, 3 were gross positive, or 10%. I think that's the lowest number ever. Also a sure record is the fact that NOT ONE trader made over $1,000 gross today while, get this, 19 LOST OVER $1,000 gross. Jawbreaker, perhaps this is the end afterall... I was #17 of 29. Smoked.

(One note of congrats to Trader $ and Trader X, both found their way to the RO through this blog and both avoided death...)

"Chambermaid" - Trader L, -$8,780 on 33,800 shares traded.

2. Trader F, -$8,351 on 37,200 shares traded.
3. Trader C, -$6,894 on 120k shares traded.
4. Trader V, -$6,390 on 69,800 shares traded.
5. Trader B, -$6,220 on 263k shares traded.

"Lucky Pierre" - Trader T, $668 on 6,100 shares traded.

2. Trader $, $136 on 11,400 shares traded.
3. Trader X, $129 on 7,800 shares traded.
4. Trader 9*, -$137 on 1,900 shares traded.
5. Trader 8, -$325 on 16,600 shares traded.

This Makes No Sense

I have two friends who are both trying to refinance their homes.

Their situations are drastically different. One couple is young, early 30s with a very high mortgage, close to $6,000 a month. It's some "exotic" loan. They tried to refinance and get a 30 year fixed, but were told they could not because they do not meet the income qualifications.

So, they got their first mortgage, which is just pure awful, and now they are attempting to refinance so they can lower their payments and stay in their home. But because they don't earn "enough" they cannot refinance and will probably lose their home.

A Catch 22, no?

The second situation involves my father in law. He is retired, and simply wants to reduce his mortgage payment. He is locked into a 30-year fixed already, but at over 6%. He tried to refinance when his bank was near 5%. This would have reduced his monthly payment by $300 or so. But, because he is retired and without an income, they won't let him. They told him that if he drew out of his 401k regularly, that they could count this as an income and give him the mortgage. But he doesn't need or want to draw from his 401k right now... he has the money just sitting there, but because he's not drawing on it, they won't give him the new mortgage.

Meanwhile, my high end real-estate friend tells me of people who owe a couple million on residences that aren't close to that value anymore and who are cutting deals with banks to lower their rate. Why? Because the banks don't want to foreclose on such ridiculously overvalued properties.

These banks need to burn.

A Trade In FAZ

I was going to start this post with a bold assertion along the lines of, "I milked this trade much like a perverted farmer might go at the teats on a cow."

However, you see that big run after 1pm? I totally missed that. It was a big miss, and I was humbled yet again by Mother Market.





Anyway, I caught the morning trade pretty damn good, so I'll talk about that.

It didn't start well. I woke up, wiped some sleep from my eyes and turned on my screens. FAZ was trading over $49 pre open. There was an HCPG level at $48. Not knowing about the market news that was to drop at 8:30 (Trader A would ask, "How come you never know what's going on?") I put in a bid at $48.10, hoping the $48 level would be support on a pullback.

At 8:30 when the news came out, my limit was hit and the stock immediately plummeted 4 points from my entry. How's that for a nice welcome to the trading day? It seemed bad, but in a way, it alerted me to the fact that FAZ had some good support at $44, or at least recent congestion. So I added to the position at good levels and by the time the open rolled around, I was basically back to flat on the day with only 100 shares remaining.

FAZ opened for regular trade and pushed higher before pulling back down toward the $44 level, where I added a couple hundred more shares at around 9:40.

Why was I added to this position? I had 3 reasons. First, I felt I was adding in a fairly safe area due to the recent congestion around the $44 level. Second, the HCPG level up at $48 was close enough (and I was bearish enough) that I felt it might act as a magnet. Third, and this is what really caused me to stay with this trade was the fact that on a 60-min graph, the downtrend line aligned nearly perfectly with $48.

So I felt there was a double magnet pulling the stock higher, and decent enough support just below my entry.

I'm not going to bore you with all the entry and exit details, but that was my thinking for the trade. Miraculously, it worked out according to plan and I did a solid job of exiting. I purchased again when it pulled back to the $48 level and made another nice, though smaller, trade.

I felt great.

Of course, then I moved the solid move in the afternoon, barely, and nearly lost my mind. But that's trading for you... you're a genius one moment, and a complete idiot the next. At least that's how it is for me.

Sunday Space

"One cannot seek other shores without consenting to lose sight of land for a very long time."

-Andre Gide

Big War - John Allingham & Ann Tiley

NOTE: I'm updating my blog a bit, creating an archive of some of my favorite posts and others I deem "important." This will take weeks to complete probably...

What You Missed

A lot transpired here this past week so I've decided to wrap it all up for you in a sort of sick, self-linking sort of way. Take THAT stock-blogosphere!

Okay, first of all, since ostensibly, this is a stock blog (har! har!) I discussed a good trade I made in FAS. Then, as fate (and irony) would have it, I "chambermaided" myself the next day, mostly due to a bad trade in FAS.

But I moved on, and in the first installment of the Dinosaur Trader book club, I offered some thoughts I had on Michael Marcus, the famed futures trader. Then, out of nowhere, I got a bit creative on your ass and shared a bit of my history with you. Knowing that you hate it when I get all serious, the next day I tried to be funny. Finally, I give back to the Internets with a big linklove post.

Now I ask you, where else do you get such non-stop quality? I hope to provide you with more original content next week. And look, if you enjoy it here, please, tell your friends about this blog... I can't take "the Fly" calling me a "third-tier blogger" for too much longer. Thank you... that is all.

The Wrens, "She Sends Kisses"

The RO Report, "FUCK CNBC" Edition

As "the Fly" discussed last night, CNBC is not only not good at educating the average Joe about finances, it's very good at fucking up professionals.

This whole Leisman/Gasparino good bank/bad bank crap is pure idiocy that does nothing more than cause irrational moves in the market. They are airing out rumors... nothing more. It's problematic and needs to be stopped.

I have mentioned in a couple of places now the idea of a stock blogosphere-wide call for a CNBC boycott. There are other places to get news. Unfortunately, often, they are merely repeating the crap reported on CNBC, which creates this awful echochamber effect. Anyway, stay tuned.

The RO had an excellent day. I'm in a rush, so here's the numbers... I was #7. Oh, and one blog note, I'm going to have a brief review of the blog week here tomorrow... a self-referential link love fest of sorts...

Oh, and one more note... if you have a Digg account (simple to set up lazy-ass) I'd love if you could Digg this post. It helps me build readership. Thanks.

"Lucky Pierre" - Trader C, $9,772 on 260k shares traded.

2. Trader P, $6,557 on 195k shares traded.
3. Trader A, $4,818 on 160k shares traded.
4. Trader Z, $4,137 on 139k shares traded.
5. Trader B, $4,134 on 513k shares traded.

"Chambermaid" - Trader H*, -$3,699 on 19,400 shares traded.

2. Trader D, -$2,404 on 122k shares traded.
3. Trader 6*, -$2,024 on 0 shares traded.
4. Trader 9*, -$1,059 on 4,200 shares traded.
5. Trader 10*, -$589 on 200 shares traded.

The Week In Review

You know I'm a big media critic. And I hate CNBC... so does "the Fly." And he's dead on in this one.



Speaking of the media, there are an awful lot of goldbugs showing up on CNBC lately. Meanwhile, Complacent Panda says they're silly... take THAT goldbugs!

For all you dorks and Trader P.

Stories don't get much sadder than this.

Jamie found an interesting article on proprietary traders.

Were the ants gone before they filled it with concrete? Amazing. Nature holds all the answers, I'm sure of it.

Not sure what I hate more... dogs, or their stupid owners...

Why? Because dogs are ruthless killers... check those thumbnails.

Citigroup returns new $50 million jet. Here's a funny take.

RIP John Updike.

A walrus masturbating... no really... depending on your boss's sense of humor, probably NSFW.

The most delicious meal ever? Not sure what PETA would think...

Speaking of PETA, they finally get it. Sex sells. But does it sell vegetarianism? Apparently not on the Superbowl, since this ad was banned. Can someone explain how this shit gets banned yet you can sell all the beer you want with sex?

More irony.

Is credit weakness spreading to jumbo loans now?

Anyway, can I get a bailout?

Okay, forget the bailout... I just want a clean beach.

Obama's STFU face.

Enjoy your weekend and thanks for reading this week. I will post a brief review this weekend.

Beulah, "Landslide Baby"